Global G7 deal may let Amazon off hook on tax, say experts
Source: The Guardian
The two “pillars” of the deal would make companies pay a percentage of their profits in markets where they make large sales despite minimal corporate presence, as well as setting an unprecedented global minimum corporation tax.
However, a communique from G7 ministers said that they envisaged pillar one would only apply on “profit exceeding a 10% margin for the largest and most profitable multinational enterprises”, a restriction that could rule out Amazon.
Amazon is one of the largest businesses in the world, with a market value of $1.6tn (£1.1tn) and sales of $386bn in 2020. A Luxembourg subsidiary paid zero corporation tax in 2020 on sales income from across Europe of €44bn (£38bn), making Amazon a prominent target for politicians campaigning for changes to the global tax system.
However, its profit margin in 2020 was only 6.3%. It runs its online retail business at very low profit margins, partly because it reinvests heavily, and partly to gain market share.
Read more: https://www.theguardian.com/technology/2021/jun/06/global-g7-deal-may-let-amazon-off-hook-on-tax-say-experts
So, although Amazon's profit is huge, its turnover is even bigger, compared to other companies, so it could exploit the loophole.
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